I hear this sort of rubbish from time to time, and like the OP, I wonder how such successful people can be so crazy. Nonetheless, let’s look at the facts of “investing” in a true Armageddon scenario.
First, if people are living in conditions where the banking system goes down, cash is out, since the Fed will have no control over the collapsed system and no transmission mechanism. People will not want cash if the government has lost control. By the same token, Treasuries won’t hold much value, either, since Treasuries ultimately are exchanged back for cash, and if all banks are gone, they will have dumped their Treasuries that they held in reserve in the pre-closure fire sale, flooding the market with rapidly sinking paper. Even if the Fed wanted to support the price, they couldn’t do this since banks would be the transmission mechanism they would use to do this (think the FOMC’s open market operations). And if the Fed stepped in centrally and said to the public, “don’t worry, the local banks are gone but come on down to one of our district banks and we will buy your Treasuries,” there is still the problem that people might not bite because they know they are getting useless cash – and all this after a time which your client believes that QE, etc. has already destroyed the credibility of the Fed.
By the way, is your client actually holding his securities at an institution which is connected with a bank? How does your client know it will just be banks that are impacted and not the myriad types of other financial institutions? Have you worked out a plan as to how the client can extract the assets should the place where the assets are stored shutter its doors just at a time when the client needs it most?
Also, I’m puzzled when gold is mentioned during these scenarios. If it is a true “head for the hills” disaster scenario the client is preparing for, what good is gold? If it’s like a serious “doomsday prepper” or “Walking Dead” fiasco, the value of gold would effectively be nothing. The most valuable things would be food, water and the means of survival. Even if gold had a value (as people might imagine we would emerge from the disaster one day), imagine the storage costs and practical burden on lugging around and protecting very much more than a few pounds of gold, at most!
On the farmland – sure, if he is buying an actual farm that he plans on living on right away. If your client is in Perth and the farmland is located in Queensland and owned remotely, there is no guarantee that the legal right to ownership would carry weight in a world where the legal system might not have the muscle to enforce such claims.
Guns, ammunition, various types of knives, machetes and other stabbing weapons, light body armor, long-storage-life food (such as MREs, dried and canned food), long-life water containers, extensive first aid kits (including field dressings, blood clotting agents, a collection of various splints, medicines including a wide range of antibiotics and antiseptics) and the construction of a large bunker where all this stuff is stored close to where the client lives would be advised. Most importantly, the bunker should have an outlet garage where a heavily armored, lifted truck or SUV with bulletproofing, run flat all-terrain tires and plenty of reserve gasoline/petrol is stored. However, the client should know that these “investments” are not likely to earn a return, and in fact are very likely to lose value rapidly over time, the longer they are not used.
So the client should be educated in the notion that true doomsday investing carries with it a direct opportunity cost – the opportunity cost of losing the potential return that would be earned by other clients should the doomsday scenario not come to pass.